Below is a sample of The Hightower Report’s Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
The market now holds a significant discount of June cattle to the cash market and it may take increasing bearish news to rationalize further downside for June cattle. The market closed sharply lower on the session yesterday and fund selling drove the market down to the lowest level since March 16th. Continued demand concerns and weakening beef prices helped to pressure and the weakness in the beef market has traders talking about lower cash cattle markets ahead. Talk of the hefty net long position of the speculator in a period of weak demand added to the selling pressures as trader see more commodity liquidation as a negative short-term force. Cash cattle trade emerged in Texas at $115.00, down $2.00 from last week. With the cash trade, June cattle are now trading at a stiff discount to the cash market and technical indicators are showing oversold readings. The weather outlook for the central US is showing some signs of better demand weather ahead but demand weather has been very poor for the last several weekends. The estimated cattle slaughter came in at 131,000 head yesterday. This brings the total for the week so far to 259,000 head, up from 223,000 last week at this time and up from 252,000 a year ago. Boxed beef cutout values were up 73 cents at mid-session yesterday and closed 37 cents higher at $182.16. This was down from $185.56 the prior week. With consumers in the central part of the US facing $4.00 plus gasoline prices and cold and mostly wet conditions, the barbeque season is off to a poor start; especially for higher-priced beef cuts such as steaks. This has helped keep the market in a long liquidation mode as the market adjusts to slower consumer demand.
TODAY’S GUIDANCE: While there is still no technical sign of a near-term low, June might find some short-term support due to big discount and firm tone to beef prices.
Cattle: June Significant Discount to Cash
by Terry Roggensack on May 4, 2011
Below is a sample of The Hightower Report’s Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
The market now holds a significant discount of June cattle to the cash market and it may take increasing bearish news to rationalize further downside for June cattle. The market closed sharply lower on the session yesterday and fund selling drove the market down to the lowest level since March 16th. Continued demand concerns and weakening beef prices helped to pressure and the weakness in the beef market has traders talking about lower cash cattle markets ahead. Talk of the hefty net long position of the speculator in a period of weak demand added to the selling pressures as trader see more commodity liquidation as a negative short-term force. Cash cattle trade emerged in Texas at $115.00, down $2.00 from last week. With the cash trade, June cattle are now trading at a stiff discount to the cash market and technical indicators are showing oversold readings. The weather outlook for the central US is showing some signs of better demand weather ahead but demand weather has been very poor for the last several weekends. The estimated cattle slaughter came in at 131,000 head yesterday. This brings the total for the week so far to 259,000 head, up from 223,000 last week at this time and up from 252,000 a year ago. Boxed beef cutout values were up 73 cents at mid-session yesterday and closed 37 cents higher at $182.16. This was down from $185.56 the prior week. With consumers in the central part of the US facing $4.00 plus gasoline prices and cold and mostly wet conditions, the barbeque season is off to a poor start; especially for higher-priced beef cuts such as steaks. This has helped keep the market in a long liquidation mode as the market adjusts to slower consumer demand.
TODAY’S GUIDANCE: While there is still no technical sign of a near-term low, June might find some short-term support due to big discount and firm tone to beef prices.
Tags: Cattle, Livestock
About Terry Roggensack